Feb 4 2021 by BY MICHAEL BERGER
Earlier this week, the cannabis industry saw it largest acquisition in the history of the sector and this is a headline that caught the attention of major financial media firms.
GW Pharmaceuticals plc (GWPH) was the target of the acquisition and it reported to have entered into a definitive agreement to be acquired by Jazz Pharmaceuticals plc (JAZZ) for $220.00 per share ($200 in cash and $20.00 in Jazz ordinary shares). Based on this price, the acquisition is valued at more than $7 billion and we find this to be a significant milestone for the entire cannabis industry.
The acquisition is expected to close in the second quarter of 2021 and we are bullish on the growth prospects of the combined company. We expect the combined company to be a leader in neuroscience and it will have a global commercial and operational footprint that leaves the business well positioned to maximize the value for shareholders.
GW is considered to be a global leader in the discovery, development, manufacturing and commercializing of novel, regulatory approved therapeutics from its proprietary cannabinoid product platform to address a broad range of diseases. The company’s lead product, Epidiolex® (cannabidiol) oral solution, is approved in patients one-year and older for the treatment of seizures associated with Lennox-Gastaut Syndrome (LGS), Dravet Syndrome and Tuberous Sclerosis Complex (TSC).
Epidiolex was the first plant-derived cannabinoid medicine to be approved by the US Food and Drug Administration (FDA). This product has also been approved by the European Medicines Agency (EMA) in patients two years of age and older for the adjunctive treatment of seizures associated with LGS and Dravet syndrome in conjunction with clobazam and is under EMA review for the treatment of seizures associated with TSC.
Besides for Epidiolex, GW has an attractive pipeline of treatments that are in advanced stages of FDA clinical trials. We believe this provides the business with attractive catalysts for growth over the long-term and expect Jazz Pharmaceuticals to be a beneficiary of the work that GW has accomplished.
The market responded favorably to the acquisition and GW surged higher on the announcement. After the move higher, GW is trading near the pricing of the acquisition and we will be monitoring how the story advances from here.
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